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First Home Saver Accounts Bill 2008

Part 2 Key concepts and other definitions

Division 1 Key concepts

8   Meaning of FHSA

                   An individual’s account, life policy or beneficial interest in a trust is an FHSA (short for first home saver account) if:

                     (a)  it is described as an FHSA; and

                     (b)  it is opened or issued on or after 1 October 2008 (or a later day (if any) specified in the regulations); and

                     (c)  it is:

                              (i)  an account to which an ADI accepts, or has accepted, contributions; or

                             (ii)  a life policy issued by a life insurance company; or

                            (iii)  a beneficial interest in a trust constituted by a deed, the trustee of which holds an authorisation as an FHSA provider.

9   Meanings of hold and FHSA holder

             (1)  A person holds an FHSA if:

                     (a)  for an FHSA that is an account—the account is opened solely in the person’s name; or

                     (b)  for an FHSA that is a life policy—the person is the sole owner of the life policy; or

                     (c)  for an FHSA that is a beneficial interest in a trust—the person is the sole holder of the interest.

             (2)  A person who holds an FHSA is an FHSA holder .

10   Meanings of provide and FHSA provider

             (1)  An entity provides an FHSA if:

                     (a)  for an FHSA that is an account—the entity is the ADI that accepts, or has accepted, contributions to the account; or

                     (b)  for an FHSA that is a life policy—the entity is the life insurance company that provides the policy; or

                     (c)  for an FHSA that is a beneficial interest in a trust—the entity is the trustee of the trust.

             (2)  An entity that provides an FHSA is an FHSA provider .

11   Meanings of Government FHSA contribution and personal FHSA contribution

             (1)  A contribution to an FHSA or other payment by the Commissioner that is payable under Part 4 of this Act for a person is a Government FHSA contribution of the person.

             (2)  A contribution that a person makes, or that is made for the benefit of the person, to an FHSA held by the person is a personal FHSA contribution of the person (unless the contribution is a Government FHSA contribution of the person).

             (3)  However, a contribution to an FHSA held by a person is not a personal FHSA contribution of the person if:

                     (a)  the contribution is by way of transfer to the FHSA from another FHSA held by the person; or

                     (b)  the contribution is made because of a family law obligation; or

                     (c)  the following conditions are satisfied:

                              (i)  an FHSA home acquisition payment was previously made from an FHSA held by the person;

                             (ii)  the payment satisfies the FHSA payment conditions because of subsection 17(3) (recontribution of FHSA home acquisition payment after failure to occupy a dwelling);

                            (iii)  the contribution to the FHSA is by way of a recontribution of the FHSA home acquisition payment; or

                     (d)  the payment is repaid from the FHSA in accordance with:

                              (i)  subsection 25(2), 26(2) or 27(2); or

                             (ii)  subsection 992A(4) (unsolicited offer of financial product), section 1016F (defective product disclosure document) or section 1019B (cooling-off period) of the Corporations Act 2001 .

12   Meaning of qualifying interest in a dwelling

             (1)  A person holds a qualifying interest in a dwelling if the person is the legal owner of the dwelling (whether alone or together with others).

             (2)  Without limiting the scope of subsection (1), a person holds a qualifying interest in a dwelling if:

                     (a)  the person is a lessee or licensee (whether alone or together with others) under a lease or licence that gives the person reasonable security of tenure over the dwelling; and

                     (b)  in the case of a lease—the lease is a Crown lease (within the meaning of the Income Tax Assessment Act 1997 ); and

                     (c)  in the case of a licence—the licence was granted by the Commonwealth, a State or a Territory.

             (3)  Without limiting the scope of subsection (1), a person holds a qualifying interest in a dwelling if:

                     (a)  the person holds an equity of redemption in respect of the dwelling; or

                     (b)  where the dwelling is a flat or home unit—the person is the legal owner of a share that:

                              (i)  is in a company that is the legal owner of the land on which the flat or home unit is erected; and

                             (ii)  gives the person a right to occupy the flat or home unit; or

                     (c)  where the dwelling is in an aged care facility or retirement village—the person holds a right for him or her to occupy the dwelling.

             (4)  A person also holds a qualifying interest in a dwelling if circumstances exist as specified in regulations made for the purposes of this subsection.

             (5)  Despite anything else in the section, a person does not hold a qualifying interest in a dwelling if:

                     (a)  the dwelling is not fixed to land; or

                     (b)  circumstances exist as specified in regulations made for the purposes of this paragraph.

             (6)  A person acquires a qualifying interest in a dwelling when he or she starts to hold a qualifying interest in the dwelling.

13   Meaning of main residence

             (1)  Subject to this section, a reference in this Act to a person’s main residence has its ordinary meaning.

             (2)  The regulations may specify circumstances in which a dwelling is a person’s main residence for the purposes of this Act.

             (3)  The regulations may specify circumstances in which a dwelling is not a person’s main residence for the purposes of this Act.

14   Meaning of FHSA home acquisition payment

                   A payment from an FHSA is an FHSA home acquisition payment if the FHSA provider must make the payment under section 32 (payments for the purposes of acquiring a qualifying interest in a dwelling).

15   Meaning of FHSA eligibility requirements

             (1)  A person meets the FHSA eligibility requirements if:

                     (a)  the person is an individual; and

                     (b)  the person is aged at least 18 years and under 65 years; and

                     (c)  the person has never held a qualifying interest in a dwelling in Australia or Norfolk Island at a time when the dwelling was the person’s main residence; and

                     (d)  the person has never held an FHSA when the person was aged less than 18 years; and

                     (e)  either:

                              (i)  the person has never held more than one FHSA at a time; or

                             (ii)  the person has held 2 FHSAs at a time, and the balance of one of the FHSAs was transferred to the other FHSA as the initial contribution to the other FHSA; and

                      (f)  either:

                              (i)  the person has never held an FHSA that was closed; or

                             (ii)  the requirement in subsection (2) is met for each FHSA that the person has held that was closed; and

                     (g)  the person meets the requirements (if any) specified in the regulations.

             (2)  The requirement in this subsection is met for an FHSA if:

                     (a)  the FHSA was closed following an FHSA home acquisition payment that met the FHSA payment conditions in subsection 17(3) (recontribution to an FHSA after failure to occupy a dwelling); or

                     (b)  the FHSA was closed following an FHSA home acquisition payment, and it is still possible for the payment to meet the FHSA payment conditions in subsection 17(3); or

                     (c)  the FHSA was closed as a result of a repayment made in accordance with subsection 992A(4) (unsolicited offer of financial product), section 1016F (defective product disclosure document) or section 1019B (cooling-off period) of the Corporations Act 2001 .

16   Meaning of FHSA ineligibility payment

                   A payment from an FHSA held by a person is an FHSA ineligibility payment if:

                     (a)  the payment is an FHSA home acquisition payment; and

                     (b)  the person did not satisfy the FHSA eligibility requirements when the payment was made.

Note:          This Act does not provide for the consequences of the payment being an FHSA ineligibility payment. However, the FHSA holder will be liable for FHSA misuse tax in accordance with Subdivision 345-C of the Income Tax Assessment Act 1997 .

17   Meaning of FHSA payment conditions

             (1)  An FHSA home acquisition payment satisfies the FHSA payment conditions if:

                     (a)  no later than 6 months after the payment is made, the person who holds or held the FHSA uses an amount equal to the payment in acquiring a qualifying interest in a dwelling in Australia or Norfolk Island; and

                     (b)  the dwelling is the person’s main residence for a continuous period that:

                              (i)  is at least 6 months long; and

                             (ii)  starts within the period mentioned in subsection (2); and

                     (c)  if the construction of the dwelling is not complete when the payment is made—that construction is complete within a reasonable period after the payment is made.

             (2)  The period:

                     (a)  starts:

                              (i)  if the construction of the dwelling is not complete when the payment is made—when the construction of the dwelling is complete; or

                             (ii)  otherwise—when the person acquires the qualifying interest in the dwelling; and

                     (b)  ends 12 months after the period starts, or at a later time that the Commissioner considers reasonable in the circumstances.

             (3)  An FHSA home acquisition payment also satisfies the FHSA payment conditions if:

                     (a)  the person who holds or held the FHSA fails to satisfy the conditions in subsection (1); and

                     (b)  within 6 months after the payment was made, the person contributes to an FHSA held by the person:

                              (i)  an amount equal to the payment; or

                             (ii)  a lesser amount that is reasonable to pay in the circumstances.

             (4)  For the purposes of subparagraph (3)(b)(ii), in determining whether it is reasonable to pay a lesser amount in the circumstances, have regard to:

                     (a)  whether the failure to satisfy the conditions in subsection (1) was beyond the person’s control; and

                     (b)  whether that failure was reasonably foreseeable by the person; and

                     (c)  whether any previous FHSA home acquisition payment in respect of the person has failed to satisfy the conditions in subsection (1); and

                     (d)  any other relevant matter.



 

Division 2 Other definitions

18   Definitions

                   In this Act:

ABN (short for Australian Business Number)has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999 .

account balance cap has the meaning given by section 29.

acquire : a person acquires a qualifying interest in a dwelling in the circumstances mentioned in subsection 12(6).

ADI (short for authorised deposit-taking institution) means a body corporate that is an ADI for the purposes of the Banking Act 1959 .

approved form means a form approved by the Regulator, in writing, for the purposes of the provision in which the expression appears.

APRA means the Australian Prudential Regulation Authority.

ASIC means the Australian Securities and Investments Commission.

authorisation as an FHSA provider means an authorisation granted under section 92.

authorised person means a person appointed as an authorised person under section 80.

base interest rate for a day has the same meaning as in section 8AAD of the Taxation Administration Act 1953 .

breach : an FHSA holder is in breach of the account balance cap in the circumstances mentioned in section 28.

Commissioner means the Commissioner of Taxation.

complying superannuation plan has the same meaning as in the Income Tax Assessment Act 1997 .

contribution means a contribution of money, and includes a deposit into an account held at an ADI and a payment of a premium to a life insurance company.

data processing device means any article or material (for example, a disc) from which information is capable of being reproduced with or without the aid of any other article or device.

decision includes a decision not to make a determination under section 41 or 46.

deed includes an instrument having the effect of a deed.

default superannuation plan has the meaning given by section 24.

Deputy Commissioner means a Deputy Commissioner of Taxation.

examinable documents means any documents relevant to the operation of a provision of this Act for which the Commissioner has the general administration, or regulations made for the purposes of such a provision.

family law obligation means:

                     (a)  a court order under the Family Law Act 1975 ; or

                     (b)  a financial agreement made under Part VIIIA of the Family Law Act 1975 that is binding because of section 90G of that Act.

FHSA (short for first home saver account) has the meaning given by section 8.

FHSA eligibility requirements has the meaning given by section 15.

FHSA holder has the meaning given by section 9.

FHSA home acquisition payment has the meaning given by section 14.

FHSA ineligibility payment has the meaning given by section 16.

FHSA payment conditions : an FHSA home acquisition payment satisfies the FHSA payment conditions in the circumstances set out in section 17.

FHSA provider has the meaning given by section 10.

FHSA trust means a trust of a kind mentioned in subparagraph 8(c)(iii).

financial services licensee has the meaning given by Chapter 7 of the Corporations Act 2001 .

financial year has the same meaning as in the Income Tax Assessment Act 1997 .

function includes duty.

general interest charge means the charge worked out under Part IIA of the Taxation Administration Act 1953 .

Government FHSA contribution has the meaning given by section 11.

Government FHSA contribution threshold has the meaning given by section 39.

hold :

                     (a)  a person holds an FHSA in the circumstances mentioned in section 9; and

                     (b)  a person holds a qualifying interest in a dwelling in the circumstances mentioned in section 12.

inactive : an FHSA is inactive in the circumstances mentioned in section 23.

income tax return means:

                     (a)  a return under section 161, 162 or 163 of the Income Tax Assessment Act 1936 ; or

                     (b)  a return by the trustee of a deceased person’s estate under Subdivision 260-E of Schedule 1 to the Taxation Administration Act 1953 .

income year has the same meaning as in the Income Tax Assessment Act 1997 .

indexation factor has the meaning given by subsections 30(3) and 40(3).

index number has the meaning given by subsections 30(5) and 40(5).

legal personal representative has the same meaning as in the Income Tax Assessment Act 1997 .

life insurance company means a company registered under the Life Insurance Act 1995 .

life policy has the same meaning as in the Life Insurance Act 1995 .

main residence has the meaning given by section 13.

overpaid amount has the meaning given by subsection 50(2).

owner , in relation to a policy, has the same meaning as in the Life Insurance Act 1995 .

person affected by a reviewable decision , in relation to a reviewable decision, means the person in relation to which the decision was made.

personal FHSA contribution has the meaning given by section 11.

policy has the same meaning as in the Life Insurance Act 1995 .

produce includes permit access to.

protected information means information that:

                     (a)  concerns a person; and

                     (b)  is disclosed to, or obtained by, a person to whom section 70 applies in the course of, or because of, the person’s duties under or in relation to this Act or the regulations.

provides has the meaning given by section 10.

Prudential Standards has the meaning given by subsection 121(1).

public offer entity has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

qualifying interest in a dwelling has the meaning given by section 12.

quarter has the same meaning as in the Income Tax Assessment Act 1997 .

Regulator means:

                     (a)  APRA, if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by APRA; or

                     (b)  ASIC, if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by ASIC; or

                     (c)  the Commissioner, if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by the Commissioner.

reporting period has the same meaning as in subsection 1017D(2) of the Corporations Act 2001 .

reviewable decision has the meaning given by section 74.

RSE licence has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

RSE licensee has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

Second Commissioner means a Second Commissioner of Taxation.

spouse has the same meaning as in the Superannuation Industry (Supervision) Act 1993 .

Superannuation Acts means:

                     (a)  the Retirement Savings Accounts Act 1997 ; and

                     (b)  the Superannuation Industry (Supervision) Act 1993 ; and

                     (c)  the Superannuation Contributions Tax (Assessment and Collection) Act 1997 ; and

                     (d)  the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 ; and

                     (e)  the Superannuation (Unclaimed Money and Lost Members) Act 1999 ; and

                      (f)  the Termination Payments Tax (Assessment and Collection) Act 1997 .

superannuation interest has the same meaning as in the Income Tax Assessment Act 1997 .

superannuation provider has the same meaning as in the Income Tax Assessment Act 1997 .

taxation law has the same meaning as in the Income Tax Assessment Act 1997 .

tax file number has the meaning given by section 202A of the Income Tax Assessment Act 1936 .

underpaid amount has the meaning given by subsection 46(2).